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Neoclassical economics and labour migration theory : a Canadian perspective Olligschlaeger, Andreas Matthias


This thesis examines the theoretical and empirical base of neoclassical migration analysis in economic geography. It is shown that the key assumptions of neoclassical migration analysis stem from the broader marginal equilibrium analysis and theory of resource allocation that defines the neoclassical school. Spefically, the hypothesis that neoclassical economics makes with respect to labour migration is that labour flows from low wage, high unemployment regions to regions with high wages and low unemployment, thus arriving at a state of equilibrium. This hypothesis is tested using Canadian labour migration data for 1976-1981. It is found that the hypothesis is unable to explain labour migration patterns in Canada because: first, the assumptions about human behaviour that the neoclassical model makes are both too simplistic and unrealistic, as are those about the nature of the economy, and second, migration seems to promote cumulative causation rather than move the system towards equilibrium.

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